Indiana Adoption Subsidies for Foster Parents

Submitted by PeterAKenny on October 10, 2017

Many different subsidies are available for Indiana foster parents who wish to adopt.  They include continuing your monthly payments, providing health insurance, reimbursing you for some of your adoption expenses, a federal income tax credit, and help with college tuition.  Your new child is entitled to all the financial support that is offered.

Eligibility: To be eligible for most subsidies, the child must qualify as having special needs.  Most foster children fit the definition.  If the parents feel they have been treated unfairly by the agency, or in an untimely manner, they can request an administrative hearing.

Continuing Monthly Payments: The federal (AAP) and state (SAS) governments work together in an effort to continue to match the per diem payments you received before you adopted your foster child.  Adoption per diem can continue up to age 18 and longer in special cases.  The IRS does not count this subsidy as income.

Health Insurance:  Children adopted from foster care are generally eligible for Medicaid.  Children who receive AAP or SAS subsidy are also eligible for Medicaid benefits.  Continuing Medicaid coverage is critical for most children who are adopted from foster care. 

Adoption Expenses:  Non-recurring adoption expenses (NRAE) are one-time expenses directly related to the finalization of a child with special needs. The current maximum reimbursement is $1500 per child. 

Federal Income Tax Credit:  Since 2003, families who adopted a child with special needs from foster care can claim a federal adoption tax credit even if they had no adoption expenses.

College Assistance: A foster child who was adopted after age 12 can apply for tuition relief as an independent student (FAFSA). For additional information on the tax credit and college tuition, contact NACAC's Adoption Subsidy Resource Center at 800-470-6665, 651-644-3036, or e-mail at [email protected].

Negotiating:  DCS attorneys begin negotiations for the post-adoption payments by offering the minimum amount, sometimes zero. They are trying to save the state money.  However, you need to know the maximum to which your child may be entitled.  Because of many competing interests, foster-to-adopt parents should hire their own attorney to help negotiate the subsidies. Get an attorney who is experienced and knowledgeable about adoption subsidies. 

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